Key highlights of the call

The net sales for Q3 FY17 grew by 13% to Rs 220 crore led by increase in Franchise IMFL revenues. Commencement of bottling operations in West Bengal during the quarter assisted performance. Bulk alcohol as well as IMIL segment supported overall growth. The net profit declined by 40% to Rs 2.08 crore,

Turnaround in Q3 FY17 performance as compared to Q2 FY17 on the back of lower raw material prices. Raw material prices cooled off notably which led to 45% EBITDA growth. Raw material prices are stabilizing – to help reduce price volatility

Revenues from manufacturing business stood at Rs 123.7 crore in Q3 FY17, higher by 19%.

Franchise IMFL volumes improved to 11.0 mn cases in Q3 FY17, from 10.1 mn cases in the corresponding quarter last year

Apart from volume growth in Franchise IMFL business, the performance was supported by steady gains in bulk alcohol as well as IMIL segments

Share of consumer business stood at 44% in Q3 FY17 against 47% in the same period last year. Growth in Consumer Business came in at 4% YoY

IMIL revenues grew by 5% to Rs 96.6 crore. This was achieved despite zero revenues from Bihar in Q3 FY17 as compared to Rs 102 crore in the same period last year

Rajasthan registered sharp volume growth of 18% to 2.09 mn cases and revenue growth of 19% to Rs 69 crore, while the volume growth in Haryana stood at 17% to 0.80 mn cases and revenue growth of 20% to Rs 23 crore . Higher realizations also supported the overall growth

Market share of Rajasthan improved to 30% in Q3 FY17 vis-à-vis 28% in Q1 FY17, despite demonetization announcement in Q3

Delhi registered decline in volume growth from 0.18 mn cases to 0.16 mn cases and revenue de-growth of 6% to Rs 4.6 crore

Capacity utilization improved to 95% in Q3 FY17 compared to 94% in the same period last year

Bulk Alcohol revenues increased by 7% to Rs 58.5 crore. Volume was stable at 13 mn BL. Revenue growth was driven by higher realization; realization improved by 9%

Franchise Bottling volumes stood at 1.102 mn cases vs 1.011 mn cases in Q3 FY16. West Bengal reported volumes of 0.252 mn cases in Q3 FY17 – which is the first quarter of commercial production. Rajasthan witnessed 32% volume growth YoY which was partly offset by 45% decline in Haryana

Greenfield distillery in West Bengal commenced commercial production in January, 2017 – one of the largest distilleries in the state with a capacity of ~33 million BL.

The company received license for manufacturing and marketing IMIL products in West Bengal – huge opportunity for to the company to launch and market branded IMIL products going forward. Expected to launch IMIL brands in the state by FY18

West Bengal continues to be an alcohol deficit state with demand surpassing overall supplies – expect to quickly ramp-up sales volume

Successfully extended bottling relationships with USL in West Bengal, which has positively contributed to the overall performance; anticipate off take to further improve in the coming quarters

Commenced commercial production at the Greenfield distillery in Bihar – to have capacity of ~26 million BL. Exploring further course of action as Govt. of Bihar, vide their notification has informed that the existing licenses of production of ENA from Grain Based Distilleries, IMFL manufacturing or Bottling Plants shall not be renewed by the Bihar State Government from the Financial Year 2017-18

Combined capacity at West Bengal & Bihar to be 60 million BL; over 60% of existing distillery capacity. To cater the growing need of Bulk Alcohol in West Bengal, which is witnessing a huge deficit of ~80 million liters. Bulk Alcohol manufactured at the Bihar distillery will be exported to other alcohol deficit states and neighboring countries

Bottling relation extended with USL for WB.

Realization of ENA in West Bengal is in line with Rajasthan realization. It is Rs 42-44 per litre. Raw Material cost in Rajasthan is 75% of ENA price without including DDGS. West Bengal raw material cost is 65% of ENA price.

Gross Debt is around Rs 271 crore at avg. cost of 10.8%. Repayment is in range of Rs 30 crore per year.